Insurance company renegs on policy

MA-Caver

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One of the other little things that need to be fixed in this country.
Young widower pushes for change in Mass. life insurance law
Saturday May 10, 1:35 pm ET
By Denise Lavoie, AP Legal Affairs Writer
Widower seeks change in Mass. law after life insurance claim denied in young wife's death
http://biz.yahoo.com/ap/080510/widower_vs_insurer.html
ASHLAND, Mass. (AP) -- When Jenny and John Crowley learned they were having a baby, they did the responsible thing: they bought life insurance.
Barely in their 30s, they passed the insurance company's physicals, applied for a $500,000 policy for Jenny and a $1 million policy for John, and thought they wouldn't have to worry about it for decades.
The Savings Bank Life Insurance Co. of Massachusetts was so taken with the Crowleys, the company used a photograph of their newborn daughter swaddled in a yellow blanket on the cover of one of its brochures.
Just one year later, Jenny was dead of an aggressive form of breast cancer, and when John tried to start his life anew as a single father, SBLI rejected his claim for it to pay his wife's policy. The company claimed that even though doctors said Jenny was healthy, she must have been sick before they agreed to insure her.
"I took solace in the fact that I had this life insurance policy that was designed to protect me financially. Without that, it put a lot of stress on me," John Crowley said. "Financially, I was thinking about how am I going to care for my daughter, how am I going to be a mom and a dad? It's a very rough and kind of scary situation."
They checked them out and found them both healthy and thus insured them. Then she develops breast cancer and dies and now the company wants to say that the couple hoodwinked them?
Now if doctors proclaimed the two healthy then how could they have hidden something so obvious as cancer?
Basically as I see it the insurance company just doesn't want to shell out the half million bucks.
Insurance is a very important thing for anyone to have. Dying without it leaves those you love stuck with your bills and it takes away something, while not as important as the love you provide them, the money that you earn to keep the family going is now gone. Even if it's a single working parent household it still puts a burden financially on the surviving parent, especially if the surviving parent is the primary breadwinner of the family.

Nice thing is that this story does have a happy ending of sorts.
SBLI, which has since settled with Crowley, acknowledges that it changed its own policy several months ago and is now supporting Crowley in his fight for the legislation, dubbed "Jenny's Law."
"Under precedent at the time, it did require that a person be in good health when the policy was issued, even if they didn't know about it," said general counsel Terence O'Malley. "We reviewed all that and agreed that a different standard should apply."
In most states, "good health" is clearly defined in insurance laws, but in Massachusetts the courts have relied on precedent set in cases dating back to 1920 that put the burden on policyholders to demonstrate that they were in good health when the policies were issued.
Under the proposed law, which is expected to come up for a vote this spring, there is a presumption that the policyholder was in good health -- otherwise, the insurer would not have issued a policy.
It is hoped that other insurers will follow suit or at least most of them have the corporate policy to pay up if the insurer passes their examinations.
A law definitely needs to be in place not only in Massachusetts but in every state of the union that will protect the insurer and see to it that they get the full amount stated on the policy.
Some policies I've seen have this little clause on them that you can "borrow" against the policy and pay it back little by little (called Whole Life)... but if you die and were say insured for ohh, 50,000 and borrowed 45,000 and paid back so far 5,000 you still only get $5,000 at death and OWE the remainer.

How does your policies stand up? Are you sure that your family is going to be taken care of and receive the full amount that you're paying for? Some of those things have to be gone over with a fine tooth comb, especially in the small print.
Don't take chances... get insured even if you're single. $50K should do it. It'll get you buried nicely and pay off any outstanding debts that you might have. Your family shouldn't be stuck with your debts.

Discuss?
 
Insurance companys are just as big as of thiefs as the big oil company's.
 
I don't have insurance. The company I was with for years dropped me after I missed a payment and refused to renew when they learned of my current health issues. So far, I've been unable to find another company willing to insure me. (issue is injuries from car accident in 2005)
 
I don't have insurance. The company I was with for years dropped me after I missed a payment and refused to renew when they learned of my current health issues. So far, I've been unable to find another company willing to insure me. (issue is injuries from car accident in 2005)

That right there is one example of the reforms that need to be done in the industry. The injury/issue you sustained from the car accident wasn't your fault was it? It wasn't intentional? Of course not but the companies don't want to take a liable risk that you'll croak or have far expensive hospital/doctor bills and there it says something about the one hand washing the other on just the medical side of insurance.

If someone has a potentially terminal illness... alright don't insure them for a million bucks but at least insure them for the amount of their annual income for say 5 years so that the families have a chance to get back on their feet without falling flat on their face and outta their homes.

Multi-billion dollar a year companies and they don't want to lose a dime. They'd love it if folks lived to be 100 or so. They'd hang on to their money longer.
 

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